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By Jonathan Kurdell

Cutting corners can be a good way to lower your cable or cellular bills, but think before you decide to go the same route with your auto insurance. Consider what can happen and what’s at stake when you carry just the minimum requirement in liability.

Catastrophic Medical Claims
Connecticut law requires you to carry coverage of at least $20,000.00 per person and $40,000.00 per accident. These limits cover medical costs for anyone (except you or a family member) injured in an accident when you are at fault. It may be enough for a broken bone or a mild case of whiplash, but what happens when serious injuries exceed coverage limits? Another cost due to physical injury is loss of income. While the victim’s insurance company may pay the bills, it is likely that they will seek reimbursement. This means if the victim doesn’t sue you, his or her insurance company probably will.

Damage to high value autos
There are a lot of high-value vehicles on the road. What happens if you hit a Lexus, Mercedes — or a Bentley? Accidents happen. Even if you’re a safe driver, you still might slip on a snow-covered hill and crash into an expensive car. If you total a $50,000.00 vehicle and have only $10,000.00 in property damage coverage, you’re going to have to pay the other $40,000.00 yourself! Just like with medical claims, if the other driver’s insurance company pays, they’ll sue you for reimbursement.

No One is Too Poor to be Sued!
People with large bank accounts know they need high coverage limits to make sure they don’t lose their assets in a lawsuit. Unfortunately, there are people who assume they’re so broke; no one would bother to sue them. What they don’t know is that they’re putting their most valuable asset at risk, their future earnings. If you’re found responsible for a loss that’s too big for your insurance to cover, the person or company that sued you can garnish your paychecks for the rest of your life.

Pay a Little More Now or A Lot More Later.
Raising your liability coverage from 20/40/10 to 100/300/100 may not cost as much as you think. It will only raise the liability portion of your policy. In many cases, companies will lower your comp and collision rates when your liability limits are higher. Even if you only carry liability on your policy, the increase in premium will be about 10% to 25%. That’s not much considering that you’re getting 5 to 10 times more coverage.

Insurance companies believe that people who select higher coverage limits tend to be more responsible. Often companies will give discounts to new clients who have carried high coverage limits on their policies. For now, it might cost you an extra $10.00 to $20.00 per month, but you’ll be able to drive without putting your financial future at risk.

Remember: Auto liability coverage pays for damages caused by you through negligence to another person or their property.

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